ISRAEL'S EARLY ELECTION SET FOR MARCH 17

Israel is gearing up for one of its most stormy election campaigns in its history.

After Prime Minister Bibi Netanyahu fired the leaders of two coalition partners from his cabinet, Israeli voters are headed for an early election on March 17th, 2015

The process has been set in motion for the Knesset to dissolve parliament after just 18 months in office. There are no snap elections in Israel - the law stipulates some three months for an intensive election campaign that is funded by public money. Each party selects lists of candidates that are presented to the voters. After ballots are tallied, it will then be up to State President Reuven Rivlin to meet with the various elected parties with the aim of selecting the party leader with the best prospect for forming a new coalition government; in other words, one that can command a parliamentary majority in the 120-member House.

What is likely to dominate is the all-important issue of whether to compromise on withdrawing from part of the West Bank in return for a possible peace deal with the Palestinians.

Although many parties will be running, the campaigns will focus around the Right Wing and the Center-Left blocs. Inside these two groupings a fierce battle will be waged for supremacy. On the Right, which opposes any real compromise with the Palestinians, out-coming Prime Minister Bibi Netanyahu will be facing off against Naftali Bennett of the far Right Jewish Home Party and Avigdor Lieberman of the Russian immigrants' party. On the Center-Left it will be a free-for-all among Labor's Yitzhak Herzog, Yair Lapid, Tzipi Livni, and Zahava Gallon of the far Left.

In addition to the fireworks inside the two blocs where the parties will be vying for prospective voters, there will also be a battle royal across the fault lines of the two blocks. What is likely to dominate is the all-important issue of whether to compromise on withdrawing from part of the West Bank in return for a possible peace deal with the Palestinians. The Center-Left says ‘yes’, the Right says ‘no way’! (Two ultra-orthodox parties are more or less guaranteed some eighteen seats in the Knesset while the Arab parties will garner about eleven).

Mission impossible...

An Israeli government can hold office for four years, but the last election was held on January 22 of 2013 and has served a very brief term, even by Israeli standards. As a result of the surprise showing of the new Centrist party led by Yair Lapid, Netanyahu was forced to include Lapid and the far Right Jewish Home party in order to form a coalition. Tzipi Livni's party, which is driven by its peace agenda with the Palestinians, was the fourth member to join the Netanyahu-Lieberman cabinet.

It turned out to be a mission impossible with the different partners pulling hard in different directions so it was only a matter of time before Netanyahu had to throw in the towel by charging that Lapid and Livni had conspired with the religious parties 'to carry out a putsch' against him. Therefore he fired Lapid and Livni from their cabinet posts which triggered the bolting of their respective parties from the coalition. Lapid, like Livni, pressed for an active peace process with the Palestinians and also opposed building new housing projects in eastern Jerusalem and the West Bank.

But the biggest blowup was over Finance Minister Lapid's economic policies. Netanyahu like everyone else was amazed by Lapid's meteoric rise in the last election. Out of the blue a former TV journalist had won 19 more seats than any other single party in the campaign. (As a result of Netanyahu and Lieberman running on the same ticket, the Likud wound up with only 18 candidates entering the Knesset).

Nearly every qualified economist in the country ridiculed the plan, arguing it would actually lead to higher home prices. But Lapid persisted and the cabinet actually approved his voodoo economics!

At the time, it was widely believed that Netanyahu manipulated Lapid, who lacked any economic experience, into the Finance Ministry where he would be bound to fail. In fact, Lapid proposed a cockeyed scheme for easing the housing shortage by cancelling the 17% VAT on young couples buying a new home for the first time. Nearly every qualified economist in the country ridiculed the plan, arguing it would actually lead to higher home prices. But Lapid persisted and the cabinet actually approved his voodoo economics!

In a speech to the nation, Netanyahu divulged that he actually opposed the idea but nevertheless voted for it! Therefore the PM bears blame for Lapid's economic blunders by forcing the Finance Ministry on him in the first place. In effect, Netanyahu sacrificed the national interest for his own political convenience. On the other hand, Bibi and his Likud party have been turning to the far Right with their backing of the 'Nationality Bill' that has been criticized at home and abroad. On this score, the Likud is trying to compete with Naftali Bennett's Jewish Home party that favors unlimited building on the West Bank and annexing much of it.

What happens now?

Israeli law stipulates that although the government will formally fall in a few days, it will continue in power until after the upcoming election and a new coalition takes office. (In Israeli politics, no one party has ever won a majority in the Knesset, and must always form a coalition). In the election campaign, Labor and Meretz will join Lapid and Livni in campaigning for a renewed Palestinian peace process and an end to West Bank building. There is talk of their forming a united bloc. This also applies to economic policy and trying to reduce the rising cost of living.

In the election campaign, Labor and Meretz will join Lapid and Livni in campaigning ... Netanyahu can be expected to rebuild his burnt bridges with the ultra-orthodox...

For his part, Netanyahu can be expected to rebuild his burnt bridges with the ultra-orthodox parties in order to gain their support in coalition contacts after the election. Their spokesmen have already made clear that Bibi will have 'to turn the clock back' if he wants their backing. This will mean killing the legislation about ultra-orthodox men being recruited into the IDF, a red hot potato in Israeli politics. Also on their shopping list will be greater government grants for their religious institutions, as well as increased child allowances for large families. If given the chance the ultra-orthodox parties generally prefer joining a Likud coalition.

Kahalon - a game changer?

A lot is at stake in the upcoming election. Although Lapid's party is bound to lose big, his former voters can be expected to remain in the Center-Left of the political spectrum. The question is how many low-income earners, primarily from the Sephardi community, will continue their traditional support for Likud and its tough stance against the Palestinian threat? They, more than anyone else, have been hit in the wallet by Likud's economic policies in recent years.

Kahlon, a Sephardi from a poor family, quit the Likud party at the peak of his popularity in protest over its capitalistic policies.

This is where a very popular former Likud Cabinet Minister Moshe Kahalon could be a game-changer. Kahlon, a Sephardi from a poor family, quit the Likud party at the peak of his popularity in protest over its capitalistic policies. He had risen to political prominence by single-handedly reining in a virtual monopoly of cell-phone companies that had been price-gouging the public.

Kahalon is forming a new party that will challenge the Likud. On the other hand, Kahalon is no dove in foreign and defense policy - so far he has steered clear of war and peace issues. However now that Netanyahu has crossed the Rubicon, Kahalon will have to articulate where he stands. If the would-be champion of Israel's have-nots decides to jettison the Likud's ‘Land of Greater Israel’ ideology for a more moderate Centrist position, he could draw voters from both the Left and the Right.

There is a precedent - Tzipi Livni is a former Likudnik who 'saw the light' and, unlike Netanyahu, she has been driven by the two-state solution. This will be a very hard-fought, no-holds-barred election campaign.

PS: One very positive result of the early election is that Netanyahu's highly controversial 'Jewish nationality' bill has been put in the freezer.